As a professional in the field making an informed WAG (Is there such a thing?) how much further percentage-wise are oil stocks likely to fall?
my qualitative WAG [for that certainly exists] is that even healthy oil company stocks have further to go before they catch up to the drop in oil; 10-20% more over next year wouldnt surprise me. I also wouldnt be shocked if PBR went to $3. I hope none of those things happen but hope hasnt proven to be a good strategy.
I think many companies have been budgeting for $80ish/bbl over past couple years and have been quite happy to get more but they havent gone hog wild on spending and are likewise reacting conservatively to the swing to $50ish/bbl.
On the depressing side: I've heard non-specific talk that N. Sea operations are hurting and see signs of project cutbacks in places you might not expect. Apparently, real estate prices are dropping in places that havent seen such things since 2010 and rental places in scenic Fort Mac are now easy to find. However, I havent heard of mass layoffs. There is paring but it's not a slaughter like 1986, 1999, or 2009. If oil prices stay as they are now or drop further over next 3-6 months, i think we'll see a lot of layoffs and pervasive cutbacks in drilling and that will put a bottom on oil. Alternatively, US economic growth could eat up the small surplus that currently exists and we'd be at the bottom about now. So I'm 'hoping' that you're one of those very talented stock prognosticators and I'm wrong.
Charlie
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